Town's Liability Insurance Dropped: Limo Crash, Wineries Deemed 'Unnecessary Risk': Russell

SOUTHOLD, NY — Southold's general liability insurance carrier dropped the town this year — citing "too much risk" after the deadly Cutchogue limo crash and the growing number of wineries in town, according to Southold Town Supervisor Scott Russell.

Russell said the town's general liability insurance carrier for 2016 was Houston Casualty Co. and its premium for 2016 was $321,000. But now that premium has risen an additional $142,000 per year, due to the need to find a new carrier.

"We had issued requests for quotes for 2017 as we do every year," he said. "The carrier that we had our policy placed with notified us that they weren’t submitting a quote for 2017. The reason was the concern for future liability."

Russell noted that both the limo crash on Route 48 and the growing number of wineries in Southold, the company believes, present too much risk.

The deadly limo crash on Route 48 and Depot Lane in July, 2015 left four young women dead and four seriously injured. Since the crash, residents have been crying out for a traffic signal with a green turning arrow, and enhanced police presence to watch for limos trying to make the same unsafe turns.

Houston Causality Co. had been the town's carrier for a few years and is the company that will be responsible for the cost of claims that are the result of the accident, the supervisor said.

"The company believes that the possibility of future events exposed it to unnecessary risk," Russell said.

After being dropped, the town received quotes from four companies, he said.

"All of them were considerably higher than our 2016 policy," Russell said.

The first company offered a quote of $756,442 with a $25,000 deductible; the second, $566,527 plus a cost of $45,504 to be paid over five years, with a deductible of $25,000; and the third, was a quote of $700,310 with a deductible of $100,000 — and would not issue a policy with a lower deductible.

Finally, a quote from The Travelers Companies insurance firm was $468,633 with a $25,000 deductible, Russell said.

"We obviously went with the Travelers' policy," Russell said.

The difference of $142,000 that the town must now pay is, as of yet, not budgeted for, the supervisor said.

Russell added, "Southold's changed and insurance companies view us differently. They see a high probably of risk based on our current businesses and either want to charge us huge premiums or, in the case of some, have no interest in insuring us at all."

There are several factors that contribute to the insurance industry's calculation of the town's "risks," he said.

"Every decision we make, or don't make, as a town has fiscal impacts. Public amenities such as beaches or parks, or the general liability of operating a workforce, impact our insurance costs. The land use and zoning decisions do, as well. Apparently, our carrier saw changes that presented risks they weren't willing take. The board has a obligation to the taxpayers to consider all of the costs associated with our decision-making and should make every effort to limit our exposure to unnecessary and avoidable costs."

Jon E. Shearin, the town's broker at the Roy H. Reeve Agency, said the town's former carrier refused to renew one part of their package in late October. "The specific reasoning as that the current policy term structure and pricing do not support the loss history."

He added, "One of the major losses that caused the problem was the Route 48 accident. It was a large player in the reasoning behind the decision. Although it is a county road, it does intersect with a town road."

Shearin said the accident was "horrific. A very, very sad situation. It's a very political issue and there is a possibility the town's insurer is going to be paying substantial loss. There is a possibility they won't, but insurers always think the worst."

A request for proposals was issued before the new company was chosen, Shearin said.

Houston Casualty Co. covered the town for "many years. And quite honestly, they were getting a pretty darn good premium in the past," he said.

And although the company did offer a new policy term and premium, "it was just not economically feasible to go with that program."

The new insurance went into effect on Jan. 1; there was no lapse in coverage, Shearin said. "The old went out and the new came in," he said.

Any carrier looking to insure a municipality or any business looks for loss runs, Shearin said, listing all the losses the town has over a period of five years. "They look at the potential for future losses."

Councilman Jim Dinizio said the insurance rates highlight the town's need to take a conservative stance on spending.

On Tuesday, he voted no to three resolutions "that would spend money unnecessarily . . . and will continue to do so until I am presented with a plan that details just where we will get the money to pay for it. We voted to pierce the cap this year in order to start maintaining our roads and it is my position that we stay on that course." The resolutions he nixed included one to hire a planner trainee, another to hire an environmental analyst and a third, to purchase the highway superintendent a new Jeep, he said.

In December, a 156-page New York Supreme Court Suffolk County Special Grand Jury Report regarding the crash was released, with recommendations discussed at a press conference convened by Suffolk County District Attorney Thomas Spota.

Findings indicate that the grand jury would like to see U-turns by modified or stretch limos banned in Suffolk County and New York State, enhanced driver certification requirements, and a new traffic light at County Road 48 with a green turning arrow with a red phase for both eastbound and westbound traffic.

The "lack of regulations" regarding stretch limos was cited, as was the "inadequate traffic light" at County Road 48 and Depot Lane, Spota said.

The limousine, driven by Pino and owned by Ultimate Class Limousine, Inc., was transporting eight young women touring local wineries on July 18, 2015, Spota said; at approximately 5:11 p.m, the limo, while making a U-turn at the intersection of Route 48 and Depot Lane in Cutchogue, was broadsided by a pickup truck driven by Steven Romeo.

Spota said the DA's office plans to appeal the decision of a judge to throw out the indictment and dismiss charges against Pino.

Brittney Schulman, 23, and Lauren Baruch, 24, both of Smithtown, Stephanie Belli, 23, of Kings Park, and Amy Grabina, 23, of Commack, all lost their lives.

Injured in the accident were Joelle M. Dimonte, 25, of Ellwood, Melissa Angela Crai, 23, of Scarsdale, Alicia Arundel, 24, of Setauket, and Olga Lipets, 24, of Brooklyn.

After the tragic accident, many implored Suffolk County to install a traffic signal at the intersection of County Road 48 and Depot Lane.

But, despite the fact that a traffic signal was later installed on Depot Lane — no green lefthand turning arrow was installed, igniting an outcry from residents.

The bottom line, Shearin said, is "The Town of Southold has a vibrant winery community. While it's a good thing from an economic standpoint, insurers look at what the chance is, of it happening again. People will be riding around in limos — the same type of incident could happen again. Pedestrians are out on the road in front of wineries. That particular accident was horrendous. All the carriers ask what the potential is, of it happening again. And it could."